PETROTRIN BOARD MINUTES MISSING

Minutes of a critical meeting at which the Board of State-owned Petrotrin took a unanimous decision to insist that Exxon/Mobil pay a US $45 million penalty for its failure to complete its contract drilling work off Trinidad’s east coast has disappeared.

In a follow-up to Newsday’s exclusive story yesterday on the resignation of board member Emile Elias, and the removal of two other members, a source told Newsday yesterday that there was another dimension to the changes in the Board membership. It involved a deal that was struck with Exxon/Mobil. According to the source, the Petrotrin Board had decided unanimously that Exxon/Mobil’s failure to complete the contracted drilling programme had resulted in the company having to pay Petrotrin a (TT)$250 million penalty.

Instead of paying the money Exxon/Mobil offered to do other work for Petrotrin, to the value of US $25 million. The Board had turned down the offer and insisted that the US $45 million penalty be paid. It is the minutes of that meeting that has disappeared, it was learned. Shortly after, however, Petrotrin’s “arm was twisted” by “somebody higher up”, and the local oil company was made to reverse its decision. The Board then agreed on a divided decision to go along with the “higher up” instructions; to accept the Exxon/Mobil offer and not insist on the $250 million penalty.  Exxon/Mobil had drilled four dry wells and had decided to ditch the programme, which resulted in them being in breach of the contract.

The source said the argument that was used to get Petrotrin’s Board to change its mind was that Exxon/Mobil was of great value to Trinidad and Tobago in oil/gas exploration, and that one had to look at the bigger picture, and not insist on the penalty with respect to the east coast failure. It was not clear whether Elias had resigned because of this matter. Newsday’s report yesterday noted that Elias’s letter of resignation addressed to Petrotrin’s Executive Chairman, Malcolm Jones, was dated April 18. 2003. Elias would only confirm that he had resigned. He declined to say why he had resigned.

Meantime, two other Board members have been removed — Helena Inniss-King and Farad Khan, who was the PNM candidate for the Pointe-a-Pierre constituency. The three have been replaced by Angela Hamel-Smith, a Human Resource specialist; Andrew Thackarie, a contractor, and a senior woman public servant. When asked yesterday Prime Minister Patrick Manning denied there was a rift between himself and Elias.

Manning said he read the Newsday article “with great interest and even greater amusement,” then said, “I am not one of those who goes out looking to quarrel. I have no quarrel with Mr Elias whatsoever.” Asked whether Elias’ resignation was somehow connected to questions to be answered tomorrow in the Senate regarding the compensation package of  Malcolm Jones, Petrotrin’s Chairman, Manning replied: “Everybody knows that there is a question in the Parliament on the salary of the executive chairman of Petrotrin, and that question will be answered. I don’t understand what the issue is, as in fct we answer all those questions when they are asked.

The argument seems to suggest and has arisen out of a comment that I have made, which is that the management resources of this country are very scarce. Proper management, and therefore they attract a certain level of remuneration, and that’s the fact of the matter. It’s a pity we don’t have access in Parliament to the salaries paid in the private sector. Then you will see that we compete for the same people. It’s the same resource that we are competing for. It is when companies are in difficulty that companies require the best management.

When contacted yesterday Farad Khan said whatever happened at the Board meeting was confidential. He said he was informed about two weeks ago of proposed changes to the Board. Three persons were to be replaced and he was one of them. No reason was given; neither did he ask for one. He said he had served on the Board for one year. He saw no problem with that because it was Government’s prerogative to make changes.